Multiple research reports show that about 90% of startups fail. It has been one of the hottest topics in the startups world to identify main reasons of failure and methods to avoid a very likely fate. One of the top reasons why a startup fails is that they are not desired in market. Naturally, there are many other ingredients of undesired ultimate consequence. Avoiding the most common mistakes which lead to failure is as salient as doing the proper things and taking right steps.
You can discover these errors either by researching and analyzing failing startups, or by personally experiencing startup failure. Even though a failure is something I do not wish you to experience, it usually makes learning very powerful when you experience something. Presented list of most common mistakes are either from very reliable resources or from my own experience.
Lack of market research backing the idea
Sometimes it might not be enough to have a great idea. Even if it sounds like you have a fantastic idea in the beginning, you might face demand shortage and shortfall of desire in the market. Statistics show that successful startups are those with solution to a specific problem in the society or target audience. If you want to startup a business, make sure you bring a value-adding solution to the industry that you intend to become a member.
Although it is great to have many admirers of your idea, it will not help when you face a shortfall in demand. In order to make sure you are on the right path, it is strongly recommended to conduct a market research. There are plenty of research methods you can choose to implement to get the best insight into the market and target consumer group you plan to work with. In the end, you do not want to invent something that nobody uses.
Being a lone wolf or absence of a co-founder
Strong co-founder or partner with different skills and expertise can bring a great deal of benefits when it comes to developing or running a startup. You do not want a co-founder that always follows your lead and agrees with you at every other instance, rather you want a co-founder that feels the ownership as much as you do, backs you at your bright ideas, resists the mistakes, challenges your proposals, and brings additional value to the common goal.
Unproductive team and poor diversity of skills
A hardworking team with diverse backgrounds is an integral part of a successful startup. Diversity of skills and expertise of your team members will always contribute a better outcome. Emotional strength of the team, likewise, is a critical attribute. Every team member should feel like a shareholder, partake in development of your startup, and share the common goal of the overall team. Having a powerful team will always help you to grow faster, be responsive to problems you face, and to establish a competitive entity in the market.
Weak marketing & communication strategy and implementation
If you do not pay enough attention to development of a cutting-edge marketing strategy, it will become even more challenging to survive in a very competitive market. Having a strategy is one thing, and implementing it properly is another.
Have a concept! Clever branding and substantial competitive advantage can make your journey enormously easy. Successful name, creative logo and branding, putting your strengths upfront, and building a compelling product offering should almost stand in the center of all of your work.
You might have a brilliant idea or an exceptional product, but get a very poor demand unless you communicate to your target audience. In order to increase brand awareness, get high level of conversion, acquire desired rate of returning customers, build customer loyalty, and achieve top-level customer satisfaction, you need to use all communication channels effectively.
Except very rare self-moving products, almost every product requires a strong salesforce to keep your firm up and running. Salesforce should become a heartbeat of your team, and almost act like an engine of your startup. Even though you have a lot to do before you start the sales, it might all become a waste of time if you do not establish a well structured sales operations.
Salesforce need to behave like your eyes and ears to gather necessary feedback, besides their primary role of delivering your products and services to the consumers. Collating useful insights and reflect it on your future plans is possible mainly by the help of your salesforce.
Ignoring customers’ thoughts and lack of flexibility
It is usually not too late to save a poor startup if you choose to listen to your customers. Listening to your customers means being flexible with your idea and product development plan, and not losing yourself to the passion and ownership of YOUR idea.
It is always good to have a plan. But be flexible! Be ready to face challenges, be open to criticism, accept new ideas, and ultimately, listen to your customers.
You can find many other reasons of startup failure. I have shared only those of from my experience, or the ones I favor. Share your experiences and thoughts about the startup mistakes, and help others to survive.